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It would be a great feature if google could take into account conversion tracking, since some ads might have higher ctr% but worse conversions because of the ad text, etc.
1) Conversion tracking is nothing to do with Urchin AFAIK, and I get a "cost per conversion" column which G could optimise for. (*How* they do so is their problem!)
2) G will get more trade and more money if they can convince advertisers to spend more IMH. One way may be to optimise for the advertisers' conversions rather than CTR in order to increase flow/volume. Many, many businesses work by increasing flow, sometimes by dropping percentage take. I don't see why AW need be different.
Or maybe I completely misunderstood you on both points! %-P
It was developed by Google and has been around for some time and is already taken into consideration by the stats. It wouldn't be that much of a stretch for Google to consider conversion data when optimizing ads rather than just the simple CTR.
It's NOT a third party product or "recent acquisition".
Jtara has this confused with the new Analytics product which is not what the original poster was asking about.